Leavitt’s Diamond is an organizational management structure that consolidates its subject into four sections: Tasks, People, Structure, and Technology. Each of these pieces provides an individual contribution to the system. When following this structure, changes are made to individual parts, rather than the organization as a whole. This allows for a more detailed process of handling decisions. Because each part is so unique; however, issues can arise when making these adjustments. With this constant risk, changes are often avoided. How can organizations be sure of when it is secure to make developments?In an industrial use, Leavitt’s Diamond is most commonly used for managing companies, organizations, and various other forms of systems. All …show more content…
Although Leavitt’s Diamond is strongly conceptual, tangible evidence can be seen through the various transitions of companies. Successful change is vital in the advancement of all systems, and is something Leavitt’s Diamond directly applies to. It is common practice in many of the world’s largest company, to both acquire other companies and create constant innovation. Because these changes are vital; however, all of these companies must predict the outcome before the first step is taken. What often separates successful systems from their fruitless adversaries is their precise handling of change. A recent article published by Forbes states that 83% of mergers end in failure. This article closely followed a study performed by KPMG. The study determined the outcome of the organizational change, through the changing of shareholder’s stocks. In most cases, shareholder’s stocks were equal to, or lower than their initial value. The strongest commonality between all of these cases is an immense change in structure, tasks, or people.One example of a poor change is Compaq’s acquisitions of both Tandem Computers and DEC, in 1997 and …show more content…
Another case that exemplifies a lack of Leavitt’s Diamond’s fundamental principles is Kmart’s acquisition of Borders. In this case, Kmart wished to integrate Borders with their existing bookstore chain Waldenbrooks. Although the goal of both companies was similar, Kmart made the assumption that the people would be akin as well. This proved to be a false assumption, which led to the their end several years later—another example of a failed system, due to a lack of attention to Leavitt’s Diamond. In direct contrast to these cases, the few successful mergers happen only after properly viewing the impact on all areas of the organization. Some of the strongest examples of this are Disney’s various acquisitions of Marvel, Fox, and Lucasfilm. Throughout these sequential acquisitions, Disney’s stock has grown from $16.340, to $111.620. In addition, their net worth has increased by 32.67 billion dollars. In the case of all of these acquisitions, the various entertainment companies’ shared similar goals, yet had various differences in other areas of tasks, as well as differences in people and structure. With proper changes made to each area; however, Disney ensured successful mergers in every instance. One important aspect to note is that Disney’s initial plan for the acquisitions included the change to structure. Because decisions had been made prior to the transition, the company lost no recourses trying to
In The Goal: A process of ongoing improvement, Eliyahu Goldratt uses a form of literature that can be used even in today’s society to introduce his business theory of constraints. This theory is based on a chain with shortfall link in it. Basically, when analyzing any multipart system at any specific time, you will find the area of the system has a limited ability to maximize its goal. In order for this system to accomplish significant improvement it’s necessary to identify the constraint and redefine the system. Goldratt offers a great deal of information that is so basic to today’s management system that any who reads could absolutely benefit from.
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
The most important part of Disney’s long-term success is due to its key strategic choices and incorporation of various diversification strategies. Disney created value mainly through “vertical integration” of its business lines, especially through the concept of forward integration. For example, Disney integrated production of movies and the final distribution in cinema’s or on television, especially through its acquisition of ABC in 1995 (1, p.6/7). Through this acquisition, Disney was able to extent its boundaries quickly and gain access to a wider lev...
The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon inappropriate cultures and values. These problems often come up in the dissatisfying results of spectacular mega-mergers. The lack of success and synergies in such mergers is often based in a clash of completely different cultures, values, and styles, which make it difficult to establish effective common systems and structuresBased on the case study, extensive research and annual reports of AT&T the writer has mapped AT&T in the different domains. AT&T should strive to attain a perfect circle as close to the centre as possible, which indicates total synergy, order and equilibrium. Where the circle is skewed drastic change is needed as it moves closer to the outer ring of chaos:
This case provides a brief history of management conflict and change at Walt Disney Company. Former CEO Michael Eisner was considered to be controversial because of his abrasive style and tendencies toward micromanagement. It was this style that strained several important relationships to the Disney Company. Though his reign as CEO during the 80’s and 90’s helped advance Disney Company, it was his conflicting management style that led to his demise and the beginning of Robert Iger’s epoch at Disney. Since Iger has taken the helm as CEO Disney was ranked 67th in the Fortune 500 list for largest companies, it has become the largest media conglomerate in the world, and relationships and disputes stemming from Eisner have been reconciled.
Organizational change is a very big risk for organizations. The process of change can be very difficult for employees as well as the leaders implementing the changes. The changes are usually planned to improve the company. However, sometimes change can destroy a company when things don’t go as planned. From a change in management to a change in the company structure, or way of doing daily task, organizations must carefully execute the process of change and use change strategies that will ensure success.
Kotter, J. P. (2007). ‘Leading change: Why transformation efforts fail’. Harvard Business Review, January: 96-103.
"Change is hard because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up" (Belasco & Stayer, 1993). Is the concept of “too big to fail" an accurate term in today’s economy, or does it depend on a company’s ability to undergo change and reinvent itself? More than a decade ago, it seemed almost impossible that the seventh largest company in the Unites States, Enron, would decline so quickly. As change agent, I will analyze the demise of Enron, conceptualize the reasoning behind their failure to undergo the change, and evaluate what changes would have had to take place in order to prevent the company from going bankrupt.
Huy, Q. N., & Mintzberg, H. (2003). The rythm of change. MIT Sloan Management Review , 79 (6).
At a macro level as a result of the acquisition the combined size of Turner & Townsend Thinc was considered to be of strategic benefit to both firms. While there have been no official mass redundancies, role duplication has resulted in early retirement and resignations. However, the common problem faced after the acquisition is power struggles, excessive overhead, bureaucracy, uncontrolled layering, and decision strangulation.
However, during the 1990s, Philips and Matsushita both faced major challenges to sustain their position in the market. Changing profile of the industry and globalization forces made Philips and Matsushita’s organizational models and competitive advantages obsolete, and brought up the need for drastic actions. At the brink of a new century, the battle of two giants unraveled with CEOs from both sides implementing another round of strategic initiatives and restructurings. The pressure put on new CEOs was enormous – wrong st...
It is apparent that the only thing constant in business is change. Organizational change is often an overwhelming challenge for business leaders, managers and employees alike. The need for change may be the result of market shifts, economic environment, technology advancements or changing work force skill-set demands. Today Organizational change occurs for reasons that originate external to the organization (Chandler, 1996: Hannan & Freeman, 1984), as well as internal to the organization (Baker 1990: Prechel 1994). Thus, External constraints, internal constraints, resource dependency and increasingly growing competitive markets force organizations to change in order to maximize economic potential. Although organizational changes are usually a response in reaction to an event, companies and leaders should still expect to encounter issues. Organizations need to be more proactive and contingent on how to handle the problems that will inevitably come about. This will make the process of organizational change go smoothly as well as reduce resistance through proper management techniques. Resource dependency argues that both environmental and organizational constraints impact organizational change (Pfeffer & Salancik, 2003).
Organizational change, particularly large-scale change, becomes part of the company’s history; therefore, it is crucial that senior leadership plan the change thoroughly. Planning may include understanding the current state of the organization, the external and internal environment, and identifying the organization’s long-term vision simultaneously. Choosing the right approach is significant in the change process as it may be true with British Airlines’ wildcat strike blunder. This blunder is now added to British Airway history where they lost 40 million pounds because of an oversight. Ideally, changes in the organization will have minimal employee impact and operational disruption; however, this is not the case with British Airways when
The world is constantly changing in many different ways. Whether it is technological or cultural change is present and inevitable. Organizations are not exempt from change. As a matter of fact, organizations have to change with the world and society in order to be successful. Organizations have to constantly incorporate change in order to have a competitive advantage and satisfy their customers. Organizations use change in order to learn and grow. However, change is not something that can happen in an organization overnight. It has to be thought through and planned. The General Model of Planned Change focuses on what processes are used by the organization to implement change. In the General Model of Planned Change, four steps are used in order to complete the process of change. Entering and Contracting, Diagnosing, Planning and Implementing, and Evaluating and Institutionalizing are the four steps used in order to complete the process of change in an organization. The diagnostic process is one of the most important activities in OD(Cummings, 2009, p. 30).
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.